Term Paper CSE 306 Topic: EDI Application In Networks

Aditya Kandari RB1803A16 10803872

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CSE Department, Lovely Professional University adi24x7@gmail.com

Submitted To: Ms. Monalisa Panigrahi

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CSE Department, Lovely Professional University

Abstract This document gives information about EDI(Electronic Data Interchange) and its applications. The standards, importance, benefits all are given in this document. Keywords EDI, VAN, XML, transmission, messages, standards.

I. INTRODUCTION EDI refers to the transmission done electronically between organizations. Its done over internet. By using it paperless documents are transferred from one workstation to another. It is much more than an e-mail. The definition of EDI given by The National Institute of Standards and Technology is: "the computer-to-computer interchange of strictly formatted messages that represent documents other than monetary instruments. EDI implements a series of messages between two organizations, and one of them will act as receiver while the other as sender. The transmittance is done by the means of telecommunications or is carried through physical storage media. The whole transmission is done only by computers without any human interference except only for error correction and debugging purposes. II. EDI STANDARDS There are four major sets of EDI standards: The UN-recommended UN/EDIFACT is the only international standard and is predominant outside of North America. The US standard ANSI ASC X12 (X12) is predominant in North America. The TRADACOMS standard developed by the ANA (Article Numbering Association) is predominant in the UK retail industry. The ODETTE standard used within the European automotive industry.

The standards prescribe the formats, character sets, and data elements used in the exchange of business documents and forms. The complete X12 Document List includes all major business documents, including purchase orders (called "ORDERS" in UN/EDIFACT and an "850" in X12) and invoices (called "INVOIC" in UN/EDIFACT and an "810" in X12). III. TRANSMISSION Over years many companies have used various types and transmission as there is no restriction on using any specific method. VAN (Value Added Network) is the mostly used method. A. Value Added Network (VAN) VAN (value added network) acts as a regional post office. They receive transactions, examine the 'from' and the 'to' information, and route the transaction to the final recipient. VANs provide a number of additional services, e.g. retransmitting documents, providing third party audit information, acting as a gateway for different transmission methods, and handling telecommunications support. Because of these and other services VANs provide, businesses frequently use a VAN even when both trading partners are using Internet-based protocols. Healthcare clearinghouses perform many of the same functions as a VAN, but have additional legal restrictions that govern protected healthcare information. Value Added Networks are the go-between in EDI communications. The VAN is responsible for routing, storing and delivering EDI messages. They also provide delivery reports Depending on the VAN type, messages may need extra envelopes or may be routed using intelligent *VANs which are able to read the EDI message itself.

 VANs may be operated by various entities. B. Internet/AS2 Until recently, the Internet transmission was handled by nonstandard methods between trading partners usually involving FTP or email attachments. There are also standards for embedding EDI documents into XML. Many organizations are migrating to this protocol to reduce costs. For example, Wal-Mart is now requiring its trading partners to switch to the AS2 protocol (Wal-Mart EDI Requirement). AS2 (Applicability Statement 2) is the draft specification standard by which vendor applications communicate EDI or other business-to-business data (such as XML) over the Internet using HTTP, a standard used by the World Wide Web. AS2 provides security for the transport payload through digital signatures and data encryption, and ensures reliable, non-repudiable delivery through the use of receipts. C. Web EDI The Internet, as with VAN providers, uses its own communications protocols to ensure that EDI documents are transmitted securely. The most popular protocols are File Transfer Protocol Secure (FTPS), Hyper Text Transport Protocol Secure (HTTPS), and AS2. Web-based EDI, or webEDI, allows a company to interact with its suppliers in these regions without the worrying of implementing a complex EDI infrastructure. It enables small to medium-sized businesses to receive, turn around, create and manage electronic documents using just a web browser. This service seamlessly transforms your data into EDI format and transmits it to your trading partner. Using a friendly webbased interface, EDI transactions can be received, edited and sent as easily as an email. You will also be able to receive EDI documents and send EDI invoices and shipping documents with no software to install. All you require is an Internet connection. WebEDI has the added advantages that it is accessible anywhere in the world and you do not need a dedicated IT person to manage any software installation. WebEDI-based users can interact with VANs without incurring the costs of setting up a dedicated VAN connection. IV. EDI IMPLEMETATION EDI system organizational management structure development: It is important and necessary to have a dedicated person or team in place to manage an EDI implementation. These people will be charged with handling the technical aspects as well as acting as your company's contact point in dealing with your EDI vendor. Review of business strategy: Following the appointment of an EDI implementation coordinator, there should be a strategic review of the business. This process should unveil which aspects of your business would see the quickest or most dramatic return on investment (ROI)

from the EDI implementation. This will help with project strategy, testing, and deployment. Business strategy review & EDI system solution development: After your strategic business review has uncovered an ideal process for EDI automation, an EDI software and network provider need to be chosen to begin the first steps of your EDI implementation. Integrating EDI with existing business systems: The strategic review in Step 2 may uncover some processes that could be significantly improved by integrating information currently being help on other business systems with your organization. EDI integration with other back-office systems can improve your organization's total internal business processes, improving efficiency and saving you money. Internal business process mapping and data analysis: To help ensure your EDI integration flows as smoothly as possible (both internally and with your valuable trading partners), EDI mapping documents are created to model the linking information in a way that promotes transmission efficiency across your network. Establishing a B2B EDI pilot project with selected trading partners: Once a basic EDI system implementation has taken place, it needs to be tested before complete deployment. Select several trusted trading partners and run a trial process, noting where the EDI system excelled and what, if any, problems were encountered. Complete deployment of an EDI system amongst trading partners: After a trial B2B EDI project has been completed and steps have been taken to ensure system efficiency, the next step in your EDI system deployment is to inform and/or recruit your trading partners to the new EDI system process. Once your trading partners have been enabled and our community is linked via EDI, you have reached full implementation of your EDI system. V. EDI NETWORK EDI network communications exist in two primary methods. First are Point-to-Point Communications and Value Added Networks (VANs). Point-to-Point Communications take place when lines are established using standard communication protocols between trading partners. The connection can be set up as a leased line, which is paid for on a monthly basis and is readily available for electronic data interchange, or as a dial-up line where the communication or information transfer is established in a way similar to a telephone call. A dial-up link allows senders to batch transactions and make connections to send at certain points. A dial-up link is a more cost-effective approach when the amount of transmitted data is low. VANs are the most widely used method of EDI. Where point-to-point lines can present scheduling problems among trading communities, a VAN is a convenient

option that utilizes a mailbox service so business can continue. In this method of communication, EDI transactions are delivered to the recipient's mailbox where they are stored until accessed. It is important, however, that when using a VAN for EDI, all trading partners must agree on the same EDI standard format. Deciding what type of EDI network depends on a variety of variables. The following considerations must be made when choosing the network type for your EDI system: In-house data processing operations - this aspect to business operations can be a more significant factor in choosing an EDI network service (VAN) than how modern the technology is which the vendor is utilizing. When using a VAN, trading partners are free to connect with the network, transmit or receive data, and then disconnect as the data is not actually sent to the trading partner, but to the server that routes the data into the correct mailbox. Number of partners in the EDI trading community - the reach of the network is also an important consideration that ultimately needs to be address based on the company's needs and which vendor addresses those requirements. A good tip is to list the members of the trading community and the EDI networks they use before speaking with an EDI outsourcing vendor. VI. CONCLUSIONS EDI has many benefits, including faster communications and reduced paper costs. Implementing an electronic document system to replace a paper-based system will not only affect how your supplies are ordered, but also the way you do business. Many people who consider making the change from a paper-based document system to an EDI system are reluctant to change existing and familiar business processes that already meet their needs. Yet, as the global economy continues to grow, so does the pressure to improve products and services. Additionally, businesses are confronted with the need to reduce costs. And even though information technology has improved communication and processes, often the efficiencies of internal procedures and external procedures don't match up. Yet, as the global economy continues to grow, so does the importance of accuracy and speed in external processes and procedures. This is where EDI implementation can help. In addition to reducing paper costs, businesses are also able to be more productive with fewer resources. By taking advantage of electronic data interchange, companies can reduce overhead costs while still maintaining a high level of productivity. And because EDI implementation shortens delivery cycle times, businesses also benefit from decreased expenses that come from carrying high volumes of inventory.